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LaSalle E-REGI Index 2017 EUROPEAN REGIONAL ECONOMIC GROWTH INDEX

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Page 1: LaSalle E-REGI Index 2017 · LaSalle Investment Management | LaSalle E-REGI Index 2017 4 LaSalle E-REGI Index § Launched in 2000 - 2017 is the 18th edition of the LaSalle E-REGI

LaSalle Investment Management | LaSalle E-REGI Index 2017 1

LaSalle E-REGI Index 2017EUROPEAN REGIONAL ECONOMIC GROWTH INDEX

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01 METHODOLOGY

02 2017 RESULTS

03 THE CONSISTENT: KEY TARGET MARKETS

04 THE AFFLUENT: SOLID BUT EXPENSIVE

05 THE MOVERS: EITHER RECOVERING OR STRUCTURALLY IMPROVING

06 THE ASPIRING: ATTRACTIVE BUT FEW TRANSPARENT MARKETS

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1. Methodology

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LaSalle E-REGI Index

§ Launched in 2000- 2017 is the 18th edition of the LaSalle

E-REGI index

§ Shows relative economic performance- compared to the European average

§ Europe-wide coverage- 32 countries- 295 European regions- Focus on 100 cities

§ Strong relationship with real estate- Proxy for occupier demand- Framework for investment

Source: LaSalle (09/17)

LaSalle European Regional Economic Growth Index INTRODUCTION TO LASALLE E-REGI INDEX

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Source: LaSalle (09/17)

Components of E-REGI scoreE-REGI METHODOLOGY

60% Growth

20%

WealthGDP per Capita

current

20%

Business Environment

Political Stability, Default, Regulatory and Trade Credit

Risk, Inclusion in EU/EMU current

E-REGI Score

15%

22.5%

22.5% GDP: 5 year forecast: growth and absolute 3 year historic growth

Service Employment: 5 year forecast: growth and absolute 3 year historic growth

LaSalle European Human Capital Index2017

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Source: LaSalle (09/17)

Zoom on LaSalle European Human Capital IndexINCLUDED IN LASALLE E-REGI INDEX SINCE 2016

THEME INDICATOR VARIABLE DATA SOURCE

Skilled WorkforceEducation level Tertiary Education Attainment Level

of population aged 30-34 years Eurostat

Quality of education University Ranking scoreCenter for World

University Rankings (CWUR)

CreativityPatent production Number of patents filed OECD

Agglomeration effect Population density Eurostat

InvestmentsR&D Investments R&D expenditure as % GDP Eurostat

Tech Venture Capital Investments

Venture capital investments in Tech firms Thomson Reuters

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Source: LaSalle (09/17)

Three categories of regions in the indexE-REGI METHODOLOGY

0.00

0.50

1.00

1.50

2.00

2.50

All European regions (n=295)E-REGI 2017 scores

Other Regions Cities with Strong Scores Cities with Medium Scores Cities with Weak Scores

European average = 1

Regions with Strong Scores Regions with Medium Scores Regions with Weak Scores

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49%

55%

64%67% 68%

72%

64% 65% 65%

51%

68%

53%

63% 64%

0.00

0.20

0.40

0.60

0.80

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Correlation between E-REGI score & office take-up in 3 following years33 office markets

Correlation Average

Source: LaSalle (09/17)

Robust relationship between E-REGI performance & occupier demand AVERAGE CORRELATION OF 62% BETWEEN E-REGI SCORE & OFFICE TAKE-UP

62%

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2. 2017 Results

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2017 Headline results – Top 15

LaSalle E-REGI 20161. Paris

2. London

3. Stockholm

4. Munich

5. Luxembourg

6. Istanbul

7. Dublin

8. Madrid

9. Stuttgart

10. Oslo

11. Copenhagen-Malmö

12. Zürich

13. Lyon

14. Brussels

15. Barcelona

LaSalle E-REGI 20171. London

2. Paris

3. Stockholm

4. Istanbul

5. Dublin

6. Luxembourg

7. Munich

8. Oslo

9. Stuttgart

10. Copenhagen-Malmö

11. Zürich

12. Madrid

13. Berlin

14. Brussels

15. Lyon

+3

Source: LaSalle (09/17)

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2017 Headline results – score components

0.43

0.50

0.77

0.66

0.68

0.34

0.40

0.41

0.42

0.45

0.49

0.54

0.86

0.72

0.34

0.45

0.34

0.52

0.60

0.00 0.50 1.00 1.50 2.00 2.50

GDP

Employment

Human Capital

Wealth

Business Environment

2017 Scores

LaSalle E-REGI 20171. London2. Paris3. Stockholm4. Istanbul5. Dublin6. Luxembourg7. Munich8. Oslo9. Stuttgart10. Copenhagen-Malmö11. Zürich12. Madrid13. Berlin14. Brussels15. Lyon

Source: LaSalle (09/17)

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Source: LaSalle, 2017

E-REGI 2017 - Scores

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Four groups of cities

The Aspiring

London ParisStockholm

Tier

1

The Affluent

The Movers

Munich

Stuttgart

Frankfurt

Mannheim-Karlsruhe

Düsseldorf

Cologne-Bonn

Hamburg

Nottingham-DerbyLeeds

Edinburgh

LiverpoolMarseille-Nice

Lyon

Amsterdam

Rotterdam-The HagueUtrecht

Brussels

Antwerp

Helsinki Copenhagen

Oslo

Luxembourg

Vienna

Zürich

Geneva

BaselBern

Gothenburg

Dublin

BerlinMadrid

Barcelona

Milan

IstanbulWarsaw

Bratislava Izmir

Ankara

Poznan

BudapestPrague Krakow

Katowice

Moscow

Leipzig-DresdenManchester Bristol

Bordeaux

BirminghamBilbao

Seville

Tricity

WroclawBucharest

ValenciaBologna

RomeGlasgow

CardiffVerona-Venice

Lisbon

Zaragoza

Vilnius RigaLjubljana

Tallinn

Nantes

Athens

Genoa

Newcastle

Nuremberg

Lille

Strasbourg

Sofia

SheffieldThessaloniki

Source: LaSalle (09/17)

TurinToulouse

The ConsistentTi

er 2

Tier

3Ti

er 1

Tier

2Ti

er 3

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3. The Consistent: key target markets

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The Consistent – Most of core Europe

London

ParisMunich

Stuttgart

Amsterdam

Hamburg

Cologne-BonnDüsseldorf

Utrecht

Edinburgh

Liverpool

Glasgow

Source: LaSalle (09/17)

Tier-1 citiesTier-2 cities

Bologna

Marseille-Nice

Dresden-Leipzig

Lyon

Birmingham

Toulouse

Brussels

Stockholm

Vienna

Gothenburg

Copenhagen-Malmö

Helsinki

Lille

Frankfurt

Naples

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0.80

1.00

1.20

1.40

1.60

1.80

2.00

2.20

2.40

2.60

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

E-REGI Scores & Ranks # over timeThe Consistent

# 2

Source: LaSalle (09/17)

The Consistent: London & Paris neck and neck at the top this yearVERY SMALL DIFFERENCE IN SCORES BETWEEN THE TWO GLOBAL CITIES

# 8# 6

# 1

# 1

# 2

# 1

# 1# 1

# 2# 1

# 2

# 1# 1

# 1 # 1 # 1# 2

# 1

# 3

# 1

# 2# 2

# 3

# 4# 4# 4

# 2# 2

# 4# 3

# 2 # 2 # 2

# 1

# 1

Paris

London

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Source: LaSalle (09/17)

The Consistent: Stockholm & Munich have improved over the last 18YFRANKFURT IS THE MOST STABLE!

0.80

1.00

1.20

1.40

1.60

1.80

2.00

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

E-REGI Scores over timeThe Consistent

Stockholm

Munich

Brussels

Hamburg

FrankfurtAmsterdam

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Source: LaSalle (09/17)

How to find attractive risk-adjusted opportunities in Consistent cities?3 OPTIONS

Focus on the U (Urbanisation) of DTU+E

Take core+ risks in established locations

Invest in alternative sectors

1

2

3

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Source: LaSalle (09/17)

How to select Tier-2 markets within the Consistent?WHERE TO FIND VALUE OUTSIDE TIER-1 MARKETS?

StuttgartLyon

HelsinkiUtrecht

ToulouseDüsseldorf

Cologne-BonnMarseille-Nice

EdinburghBirmingham

BremenLeipzig-Dresden

Bologna

LilleGlasgowLiverpoolNaples

Weaker citiesStrong cities

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4. The Affluent: solid but expensive

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Zürich

Oslo

Geneva

Luxembourg

Basel-Mulhouse

The Affluent – The wealthiest cities

Antwerp

Source: LaSalle (09/17)

Tier-1 citiesTier-2 cities

Bern

Genoa

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Source: LaSalle (09/17)

Strong performance of Swiss cities driven by wealth & human capital STRONG PERFORMING CITIES BUT WITH SMALL INVESTABLE STOCK AND ACTIVE DOMESTIC INVESTORS

0.80

1.00

1.20

1.40

1.60

1.80

2.00

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

E-REGI Scores over timeThe Affluent

Luxembourg

Zürich

Geneva

Basel-Mulhouse

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5. The Movers: either recovering or structurally improving

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Milan

Madrid

Berlin

Rome

Valencia

Dublin

Bristol

The Movers – Cyclical and structural Movers

Barcelona

Seville

Bilbao

Source: LaSalle (09/17)

Tier-1 citiesTier-2 cities

Rotterdam-The Hague

Lisbon

Athens

Manchester

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Source: LaSalle (09/17)

The Movers: Cyclical Movers include Dublin, Milan & Spanish citiesMILAN HAS ONLY PARTIALLY RECOVERED ITS PRE-GFC PERFORMANCE

0.80

1.00

1.20

1.40

1.60

1.80

2.00

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

E-REGI Scores over timeThe Cyclical Movers

Dublin

Barcelona

Milan

Madrid

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Source: LaSalle (09/17)

The Movers: Structural Movers are Berlin, R’dam, Bristol & ManchesterMANCHESTER NEGATIVELY IMPACTED BY BREXIT LAST YEAR BUT EXPECTED TO CONTINUE ITS UPWARD TREND

0.80

1.00

1.20

1.40

1.60

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

E-REGI Scores over timeThe Structural Movers

Bristol

Berlin

Manchester

Rotterdam

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6. The Aspiring: attractive but few transparent markets

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Istanbul

Prague

Budapest

Warsaw

Krakow

Bratislava

Poznan

Tier-1 citiesTier-2 cities

The Aspiring – Growth-driven but lack of transparency

Wroclaw

Source: LaSalle (09/17), JLL

MoscowTallinn

Riga

Vilnius

Bucharest

Sofia

Ljubljana

Ankara

Izmir

St Petersburg

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Istanbul

Prague

Budapest

Warsaw

Krakow

Bratislava

Lodz

Tier-1 citiesTier-2 cities

The Aspiring – Growth-driven but lack of transparency

Wroclaw

Source: LaSalle (09/17), JLL

MoscowTallinn

Riga

Vilnius

Bucharest

Sofia

Ljubljana

Zagreb

Ankara

Izmir

St Petersburg

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Source: LaSalle (09/17)

Warsaw has a stronger growth outlook but Prague is more balancedMOST ASPIRING CITIES DO NOT OFFER SUFFICIENT TRANSPARENCY / LIQUIDITY BUT OFFER DIVERSIFICATION

0.60

0.80

1.00

1.20

1.40

1.60

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

E-REGI Score over timeThe Aspiring

Warsaw

Prague

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LaSalle E-REGI Index 2017

Visit the online page to download the report (available in English & in German), to access the interactive map and to watch our animation video

www.lasalle.com/research/e-regi

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This document does not constitute an offer to sell, or the solicitation of an offer to buy, and is subject to correction, completion and amendment without notice. This document has been prepared without regard to the specific investment objectives, financial situation or particular needs of recipients. No legal or tax advice is provided. Recipients should independently evaluate specific investments. By accepting receipt of this publication, the recipient agrees not to distribute, offer or sell this publication or copies of it and agrees not to make use of the publication other than for its own general information purposes.

The views expressed in this document represent the opinions of the persons responsible for it as at its date, and should not be construed as guarantees of performance with respect to any investment. LaSalle has taken reasonable care to ensure that the information contained in this document has been obtained from reliable sources but no representation or warranty, express or implied, is provided in relation to the accuracy, completeness or reliability of such information. LaSalle does not undertake and is under no obligation to update or keep current the information or content contained in this document for future events. LaSalle does not accept any liability in negligence or otherwise for any loss or damage suffered by any party resulting from reliance on this document.

Copyright © LaSalle Investment Management 2017. All rights reserved. No part of this document may be reproduced by any means, whether graphically, electronically, mechanically or otherwise howsoever, including without limitation photocopying and recording on magnetic tape, or included in any information store and/or retrieval system without prior written permission of LaSalle Investment Management. LaSalle Investment Management is authorised and regulated by the Financial Conduct Authority in the UK.

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